Our Nation continues to experience the worst collapse in its housing sector since the Great Depression. Already 5 million homes have been lost to foreclosure over the past 4 years and another 14 million homeowners are underwater with their mortgages. Mark Zandi, Moody’s Analytics Chief Economist, believes that the foreclosure crisis is the 2nd biggest drag on our economic recovery, right behind surging oil prices.
A recent series on NBC Nightly News chronicled some of the hardships encountered by homeowners who attempted to modify their mortgage loans by using the government’s modification program, the Home Affordable Modification Plan (HAMP). The attached video tells the story of the Holmes family and about how they ended up in worse shape after entering into a “Trial Modification” with their lender. It is not unlike the stories that I hear from clients on a daily basis. (NBC News Video#1)
The HAMP program has been widely viewed as a failure (Failure of HAMP). The program has been beset with confusion, reluctance on the part of lenders to grant modifications and the trap of a Trial Modification period.
The NBC Nightly News series also aired interviews with two industry professionals who highlighted how the process is stacked against the Homeowner. ( NBC News Video #2) The video illustrated how it is in the lenders financial interest to pursue a foreclosure over a modification program. It also highlighted how some modifications were denied simply to clear the backlog of applications. My clients have communicated their frustrations over the general lack of communication in the process and the general sense of a lack of organization on the part of lenders.
Locally, Lucas County Foreclosure rates show a slight increase in the number of mortgage loans in foreclosure. Reports show that 3.83% of loans in Lucas County were in foreclosure in February of 2011, compared to 3.8% of all mortgage loans in January 2011. These rates continue to impact our local families, communities and the local economy. In my next post, I’ll share some ways for those in trouble to get some help with their mortgages and to save their homes.
Michael P. Dansack, Jr.